Dollar falls below ¥118 in Tokyo on slumping stocks

The dollar slipped below ¥118 in Tokyo trading on Friday, dampened by falling stock prices in Japan and China.

At 5 p.m., the dollar was at ¥117.63-63, down from ¥118.09-10 at the same time Thursday. The euro was at $1.0868-0869, up from $1.0859-0860, and at ¥127.85-86, down from ¥128.24-25.

In early trading, the dollar was solid around ¥118.10-20 thanks to buying reflecting rising share prices and long-term interest rates in the United States.

The dollar also drew support from Japanese stocks that got off to a strong start.

But the dollar came under selling pressure as Japan’s benchmark Nikkei stock average gave up its early gains of over 300 points to slip into negative territory.

“The dollar was hit by selling on a rally after Tokyo stocks lost their upward momentum,” a currency broker said.

The dollar was also pressured by a fall in Chinese stock prices as well as parliamentary remarks by Bank of Japan Gov. Haruhiko Kuroda that the central bank is not considering additional monetary easing at the moment, market sources said.

“Unless oil and stock prices stabilize, the dollar is expected to stay top-heavy for the time being,” an official at a foreign exchange margin trading service firm said.

“The dollar is likely to remain under pressure for the time being as a risk-off mood is expected to continue to prevail,” a trust bank official said.